Correlation Between SRI TRANG and BEC World
Can any of the company-specific risk be diversified away by investing in both SRI TRANG and BEC World at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SRI TRANG and BEC World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SRI TRANG GLOVES and BEC World Public, you can compare the effects of market volatilities on SRI TRANG and BEC World and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SRI TRANG with a short position of BEC World. Check out your portfolio center. Please also check ongoing floating volatility patterns of SRI TRANG and BEC World.
Diversification Opportunities for SRI TRANG and BEC World
Good diversification
The 3 months correlation between SRI and BEC is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding SRI TRANG GLOVES and BEC World Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BEC World Public and SRI TRANG is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SRI TRANG GLOVES are associated (or correlated) with BEC World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BEC World Public has no effect on the direction of SRI TRANG i.e., SRI TRANG and BEC World go up and down completely randomly.
Pair Corralation between SRI TRANG and BEC World
Assuming the 90 days trading horizon SRI TRANG is expected to generate 26.55 times less return on investment than BEC World. But when comparing it to its historical volatility, SRI TRANG GLOVES is 21.47 times less risky than BEC World. It trades about 0.03 of its potential returns per unit of risk. BEC World Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,043 in BEC World Public on September 4, 2024 and sell it today you would lose (633.00) from holding BEC World Public or give up 60.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SRI TRANG GLOVES vs. BEC World Public
Performance |
| Timeline |
| SRI TRANG GLOVES |
| BEC World Public |
SRI TRANG and BEC World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SRI TRANG and BEC World
The main advantage of trading using opposite SRI TRANG and BEC World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SRI TRANG position performs unexpectedly, BEC World can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in BEC World will offset losses from the drop in BEC World's long position.| SRI TRANG vs. Earth Tech Environment | SRI TRANG vs. Union Petrochemical Public | SRI TRANG vs. Absolute Clean Energy | SRI TRANG vs. SAF Special Steel |
| BEC World vs. SRI TRANG GLOVES | BEC World vs. AEON Thana Sinsap | BEC World vs. Asian Alliance International | BEC World vs. Sikarin Public |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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